After opening in the positive, Indian Indices have slipped below the dotted line in the morning session due to profit booking at higher levels. Selling pressure has been the highest in Auto and Metal stocks.
Most Mining stocks are trading in the negative today. Sesa Sterlite and Coal India are among the stocks leading the losses. According to a leading business daily, the Supreme Court of India has given the go ahead to the government of Goa to auction 11.46 million tonnes (MT) of iron ore. This would be done via an e-auction under the supervision of the court. This would be similar to an earlier auction in state of Karnataka. The auction would be of iron ore that has already been mined of a value of approximately Rs 7.6 bn. The e-auction will follow a competitive bidding process to ensure fairness and transparency. A 6-member court appointed expert committee will oversee the process. The apex court had stopped all fresh mining operations in the state in September 2012 until it decided on the legality of the mines from which the ore was being extracted. It has not placed any restrictions on the export of the ore that would be won by the successful bidders.
PSU Banking stocks are trading mixed today. Oriental Bank of Commerce and UCO Bank are leading the gainers, while Corporation Bank and Central Bank are leading the losers. Corporation Bank reported disappointing results for the second quarter of FY14. The bank posted a 17% YoY growth in total income. Its interest income rose by 18.5% YoY. However, it had to set aside around Rs 7 bn as provision for bad loans as there was a sharp increase in net non-performing assets. There was also a depreciation of Rs 2.5 bn on its investments. Moreover, high employee cost and other expenses led to a 21% YoY increase in its total expenses. This resulted in about 96% YoY decline in net profits to just Rs 150 m. Corporation Bank is down 6.7% today.